EMC Tops 3Q Expectations

In another sign that 2003 is shaping up to be a stronger year for the storage industry than 2002, EMC Thursday reported third quarter revenues of $1.51 billion, some 20 percent greater than revenues reported for the same period last year.

Net income for the third quarter was $159 million, or 7 cents per diluted share, compared with a net income of $21 million, or 1 cent per diluted share for the third quarter of 2002.

The improvement in results from year-to-year highlights just how gloomy 2002 proved to be for high-tech and underscores how much better 2003 has been to date.

It also shows how EMC’s launch into software has propelled the Hopkinton, Mass.-based storage systems vendor’s sales, accounting for 23 percent of the company’s total revenue in the quarter. Specifically, the company said its replication, multi-platform management, and content-addressed storage (CAS) software sold well.

EMC President and CEO Joe Tucci says the third-quarter results reflect “strong customer acceptance” of EMC’s automated networked storage software. He also vowed that the company’s current strategy for information lifecycle management — the concept of managing storage from its creation until it is ready to be terminated — would vault the company past competitors such as IBM and Hitachi Data Systems.

To help fill in major gaps in its portfolio and better compete with main rival IBM , the company is expected to close its bid for data archiving specialist Legato Systems for $1.3 billion soon; earlier this week, EMC moved to acquire enterprise content management provider Documentum for $1.7 billion.

“With Tuesday’s announcement of our agreement to acquire Documentum and the pending completion of our acquisition of Legato, two complementary leaders in information management software, we are making the strategic moves necessary to enable our customers to manage all of their information according to its value to the business at every stage of its life, at the lowest total cost — creating the ultimate information lifecycle management company,” states Tucci.

EMC’s storage systems revenue also had strong double-digit growth, led by its new Symmetrix DMX and CLARiiON CX networked systems. In other significant deals, BMC Software became the first independent software provider to resell EMC ControlCenter storage management software, and EMC expanded its pact with Oracle to include a new joint service geared to help customers roll out Oracle’s database with EMC network-attached storage (NAS) products.

Looking forward, and assuming the purchases of Legato and Documentum will close, EMC expects fourth quarter revenues to be between $1.74 billion and $1.78 billion on earnings per share of 5 cents. The company expects software license revenues to account for 26 percent of total revenues for 2004 and 27 percent for Q4.

Story courtesy of Internet News.

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Clint Boulton
Clint Boulton
Clint Boulton is an Enterprise Storage Forum contributor and a senior writer for CIO.com covering IT leadership, the CIO role, and digital transformation.
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